Broadstone Net Lease Announces Fourth Quarter and Full Year 2024 Results
VICTOR, N.Y.--(BUSINESS WIRE)--February 19, 2025--
Broadstone Net Lease, Inc. (NYSE: BNL) ("BNL", the "Company", "we", "our", or "us"), today announced its operating results for the year and quarter ended December 31, 2024.
MANAGEMENT COMMENTARY
"I am extremely proud of our 2024 results, achieving $1.43 of AFFO per share, at the top end of our guidance, and executing on over $400 million in total investments while substantially completing our clinical healthcare portfolio simplification strategy. We are well set up for growth in 2025 and beyond through our differentiated core building blocks of growth, including a strong pipeline of new investments and more than $200 million of high-quality build-to-suit developments scheduled to phase into completion during 2025 and 2026," said John Moragne, BNL's Chief Executive Officer. "During 2024 we grew our high-quality portfolio of diversified properties with strong operating metrics, pruned tenant credit risk and lease rollover risk through targeted dispositions, and maintained a fortified investment grade balance sheet with low leverage at 5.0x and ample liquidity to capitalize on additional investment opportunities. We are proud of our accomplishments in 2024 and excited for what's to come in 2025."
As of December 31, 2024, we have substantially completed our healthcare portfolio simplification strategy, reducing our clinical & surgical assets to 3.2% of our ABR from 9.7% at the end of 2023. As a result, we updated our core property types to industrial, retail, and other to realign our portfolio reporting and emphasize our core growth property types.
FULL YEAR 2024 HIGHLIGHTS
OPERATING Generated net income of $169.0 million, or
RESULTS $0.86 per share, representing a 3.6%
increase compared to the same period in the
prior year. Generated adjusted funds from
operations ("AFFO") of $282.0 million, or
$1.43 per diluted share, representing a
1.4% increase compared to 2023 and
achievement of the top end of our guidance
range for 2024. Incurred $38.0 million of
general and administrative expenses,
representing a 3.6% decrease compared to
the previous year. Incurred core general
and administrative expenses of $29.3
million, which excludes $7.4 million of
stock-based compensation, $0.9 million of
non-capitalized transaction costs, and $0.4
million of severance and employee
transition costs, representing a 7.9%
decrease compared to the previous year.
Portfolio was 99.1% leased based on
rentable square footage, with only two of
our 765 properties vacant and not subject
to a lease at quarter end. Collected 99.1%
of base rents due for the year for all
properties under lease.
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INVESTMENT & DISPOSITION ACTIVITY Invested $404.8 million, including $234.3
million in new property acquisitions,
$115.3 million in build-to-suit
developments, $52.2 million in transitional
capital, and $3.0 million in revenue
generating capital expenditures. The
completed acquisitions and revenue
generating capital expenditures had a
weighted average initial cash
capitalization rate of 7.3%, weighted
average lease term of 10.8 years, weighted
average annual rent increase of 2.4%, and a
weighted average straight-line yield of
8.1% on new property acquisitions. Total
investments consist of $276.6 million in
industrial properties and $128.2 million in
retail properties. Subsequent to year end,
we invested $32.2 million, including $22.3
million in build-to-suit developments and
$9.9 million in acquisitions. As of the
date of this release, we have a total of
$200.7 million in remaining estimated
investments for build-to-suit developments
to be funded through the third quarter of
2026. As of the date of this release, we
have an additional $103.5 million of
acquisitions under control and $5.4 million
of commitments to fund revenue generating
capital expenditures with existing tenants.
Commenced contractually scheduled rent with
our build-to-suit tenant, United Natural
Foods, Inc. ("UNFI"), based on the
substantial completion of construction in
early September 2024, with the final
funding and full construction completed in
January 2025. The capitalization rate upon
rent commencement was 7.2%, and, together
with rent escalations, represents a
straight-line yield of 8.6%. During the
year and through the date of this release,
we sold 58 properties for gross proceeds of
$364.0 million at a weighted average cash
capitalization rate of 7.8% on tenanted
properties, substantially completing our
strategic clinical healthcare portfolio
simplification. As a result, we updated our
core property types to industrial, retail,
and other to align with the composition of
our remaining portfolio.
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CAPITAL MARKETS ACTIVITY In May 2024, we refreshed our ATM Program,
increasing the total available capacity to
$400.0 million. As of December 31, 2024, we
had approximately $360.0 million of
remaining availability. In conjunction with
our growing build-to-suit development
pipeline, we sold, on a forward basis, 2.2
million shares of our common stock at a
gross price per share of $18.29 for
estimated net proceeds of approximately
$38.5 million under our at-the-market
common equity offering ("ATM Program"),
none of which has settled. These sales may
be settled, at our discretion, at any time
prior to September 2025. In March 2024, we
renewed our stock repurchase program for up
to $150.0 million through March 2025. In
June 2024, we entered into $460.0 million
of forward interest rate swaps starting
throughout 2025 and maturing through 2030
at a weighted average fixed rate of 3.73%
Ended the year with total outstanding debt
of $1.9 billion, Net Debt of $1.9 billion,
a Net Debt to Annualized Adjusted EBITDAre
ratio of 5.0x, and a Pro Forma Net Debt to
Annualized Adjusted EBITDAre ratio of 4.9x.
At December 31, 2024, we had $907.0 million
of capacity on our unsecured revolving
credit facility. Declared a quarterly
dividend of $0.29 per share.
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